Abbas issued the call Wednesday during a meeting in Brussels with European Council President Herman Van Rompuy, The Jerusalem Post reported.
"We want to live alongside Israel and build bridges of peace with it," Abbas said. "This call is directed against settlements that were established on the territories of the occupied State of Palestine and its capital, Jerusalem, after 1967."
In July, the European Union issued guidelines prohibiting grants, prizes or loans to Israeli entities operating inside the West Bank's pre-1967 borders.
Abbas said Palestinians want Israel to be open to followers of three religions -- Christianity, Judaism and Islam.
"The establishment of an independent Palestinian state with East Jerusalem as its capital on the 1967 borders that would live in security and peace and stability next to Israel is the guarantee for world peace and security," Abbas said.